Amat manufactures pharmaceutical products that are sold through a network of external sales agents. The agents are paid a commission of 18% of revenues. Amat is considering replacing the sales agents with its own salespeople, who would be paid a commission of 10% of revenues and total salaries of S2,080,000. The income scenarios is shown here. statement for the year ending December 31, 2011 under the two Amat Corporation Income Statement Year Ended December 31, 2011 Using Sales Agents Using Own Sales Force Sales $26,000,000 Cost of Goods Sold Variable 11,700,000 11,700,000 Fixed 2,870,000 2,870,000 Gross Margin 11,430,000 11,430,000 Marketing Costs Commission 4,680,000 2,600,000 Fixed costs 3,420,000 5,500,000 8,100,000 8,100,000 Operating income Required: 1) calculate Amat's 2011 contribution margin percentage, breakeven revenues, and degree of operating leverage under the two scenarios. 2) Describe the advantages and disadvantages of each type of sales alternative. 3) in 2012 Amat uses its own salespeople, who demand a 15% commission. If all other cost behavior patterns are unchanged, how much revenue must the salespeople generate in order to earn the same operating income as in 2011? 3,330,000 3,330,000